Jindal tax swap would hurt middle class

Gov. Bobby Jindal speaks in West Monroe in 2012. Jindal is now proposing the elimination of the state?s income tax while increasing the state sales tax, a move which many believe will unfairly burden the poor and middle class in favor of wealthier residents.

Three years before the Iowa Caucus, and five minutes after Mitt Romney lost, Governor Bobby Jindal announced his candidacy for the 2016 Republican presidential nomination with op-eds in the Washington Post, Wall Street Journal, and Politico, with speeches in Charlotte and Washington, D.C., and lunches with donors and a former aide to President Nixon. Jindal's professionally crafted lines rejecting austerity, denouncing stupidity, and obsessing with zeroes make great sound bites. Too bad he's never governed that way.

Jindal argues our "path does not lie in government." Alas, the lifetime opponent of government has spent his entire life in government. Now he wants a government promotion (he's already unsuccessfully interviewed for vice-president)?

Jindal says, "We must not be the party that simply protects the well off so they can keep their toys. We have to be the party that shows all Americans how they can thrive. We are the party whose ideas will help the middle class, and help more folks join the middle class." Huey Long is blushing; however, reality doesn't back the rhetoric.

He's proposed a tax policy abolishing the state income and corporate tax and replacing the lost income with sales tax increases - a maneuver that would increase taxes on 80 percent of Louisianans, many of whom are veterans, retirees, and disabled individuals on fixed incomes. In order for this tax swap to remain revenue neutral, the sales tax would have to increase from 4 percent to 12 percent.

Why? Reality dictates sales tax increases will force residents to purchase goods out of state and online.

Instead of assisting the middle class, he's punishing the middle class. The poorest 20 percent would see an average tax increase of $395 (3.4 percent of their income); the middle 20 percent, those with an average income of $43,000, would see an average tax increase of $534 (1.2 percent of their income). The top 20 percent would see tax decreases; the top 1 percent would average a $25,423 tax cut. That's not a policy helping all Americans.

Jindal has spent five years obsessing with zeroes and promoting austerity. Tax exemptions in Louisiana have increased 167 percent at a cost of $4.4 billion dollars in lost revenue per year (our tax code has swelled to more than 400 pages). In 2012, the state collected $198 million in corporate taxes, but could have collected $1.7 billion without exemptions. The state collected $2.4 billion in income taxes, but could have collected $3.5 billion without exemptions. Forty percent of these income tax credits went to only 3,310 individuals with adjusted incomes above $1 million. The Motion Picture Investor Credit cost the state $231 million. While we all love "Duck Dynasty," Louisiana collected $1 in revenue for every $7.29 it paid out in credits. It doesn't take an economist to realize the state is getting a bad return. In the meantime, we cut education funding. "Swamp People" is more important than ULM, though every $1 spent on ULM creates $7 for the region.

Jindal writes, "Expanding Medicaid will significantly burden state budgets across the country." In an effort to save $1.1 million, Jindal ordered the state to no longer reimburse for hospice care. Who tells 5,800 people to go die in a street, shelter, or emergency room? Swamp People is more important than dying with dignity.

Jindal says Republicans should fight "for 100 percent of the votes" and "benefit every American who wants to pursue the American dream;" however, tax exemptions for the wealthy, tax increases on the middle class, denying access to medical care, and education cuts does not help most Americans and does not contribute to the American Dream. Jindal says Republicans need to stop being the "stupid party." Great idea, but let's stop being stupid with Louisiana's budget first.

Joshua Stockley is a professor of political science at the University of Louisiana at Monroe. Email him at polsprof@gmail.com.

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

Email this article

Jindal tax swap would hurt middle class

Three years before the Iowa Caucus, and five minutes after Mitt Romney lost, Governor Bobby Jindal announced his candidacy for the 2016 Republican presidential nomination with op-eds in the